Senator Aquilino “Koko” Pimentel III has filed Senate Bill 2994, a legislative proposal that could reshape the landscape for anyone who has ever considered starting a shoe business in the Philippines. The bill, titled “An Act Strengthening the Philippine Shoe Industry Providing Incentives to Local Manufacturers and For Other Purposes,” aims to revive a sector that once defined Filipino craftsmanship. For aspiring entrepreneurs, this isn’t just a policy update—it signals a shift in how the government plans to support local manufacturing, from tax breaks to direct procurement mandates.
The bill’s timing is notable. It arrives as the government pushes for import substitution and local brand promotion, creating a window for small and medium enterprises to enter a market long dominated by foreign brands. But the real question for a prospective shoe store owner is whether the proposed incentives—subsidies, low-interest loans, tax credits, and a mandated “Buy Local, Wear Local” campaign—translate into a viable business model on the ground.
What the Bill Actually Proposes for New Entrants
The bill’s structure is built around three pillars that directly affect a shoe store startup. First, the Shoe Manufacturing Hubs are designed to lower the barrier to entry for small manufacturers who cannot afford their own production lines. Second, the financial incentives—particularly the 50 percent additional income tax deduction on training and research and development expenses—aim to make it cheaper to invest in skills and design. Third, the market access provisions, including mandatory government procurement of local shoes, create a guaranteed customer base that most retail startups lack.
How the Incentives Change the Math for a Small Business
The most immediate benefit for a new shoe store owner is the import duty exemption on equipment and raw materials used in shoe production. If you are setting up a small manufacturing line or even a repair and customization shop, this exemption directly reduces your startup capital. The bill also provides tax credits on VAT paid for local raw materials and supplies, which means your input costs drop further if you source leather, rubber, or textiles from domestic suppliers.
But the real game-changer is the preferential access to low-interest loans through government financial institutions. For a first-time entrepreneur, securing affordable credit is often the hardest part of starting a business. If the bill passes and the implementing rules are drafted by the Department of Trade and Industry (DTI) within 60 days of effectivity, these loans could become a viable path to funding inventory, leasehold improvements, or initial marketing.
This distinction matters. The bill is designed to strengthen the Philippine shoe industry’s production capacity, not its retail distribution of imported goods. If your business model involves sourcing from local manufacturers or setting up your own production, the incentives are substantial. If you plan to be a retailer of imported sneakers, the main benefit will be indirect—through the overall market growth that the bill aims to create.
Fine Print That Could Catch New Business Owners Off Guard
Implementation Depends on DTI Rules
The bill tasks the DTI to formulate implementing rules and regulations within 60 days from the law’s effectivity. Until those rules are published, the exact application process for subsidies, loan access, and tax credits remains unclear. Entrepreneurs should monitor DTI announcements closely rather than assuming immediate access to incentives.
The Shoe Manufacturing Hub Pilot Is in Marikina
The bill designates Marikina City as the pilot facility for the modern Shoe Manufacturing Hubs. If you are based outside Metro Manila, you may need to wait for the DTI and local government units to identify and establish hubs in other strategic locations. The timeline for this expansion is not specified in the bill.
Tax Incentives Require Compliance
The 50 percent additional income tax deduction on training and R&D expenses, as well as the import duty exemptions, will likely require documentation and certification from the DTI or the Bureau of Internal Revenue. New business owners should budget for compliance costs, including potential accounting or legal fees to ensure they meet the requirements.
The “Buy Local, Wear Local” Campaign Is a Soft Mandate
While government agencies are mandated to procure locally-made shoes, the campaign itself is a consumer awareness program, not a law that forces private retailers to stock local brands. The success of this campaign will depend on its execution and funding, which are not detailed in the bill.
What You Can Do Right Now to Position Your Shoe Business
Start Sourcing Locally
Even before the bill becomes law, begin building relationships with local shoe manufacturers in Marikina or other traditional footwear centers. The bill’s tax credits on VAT for local raw materials will only benefit you if your supply chain is already domestic. Identify suppliers who can provide consistent quality and volume, and consider visiting the Marikina shoe district to see production capabilities firsthand.
Prepare Your Business for Incentive Applications
Once the DTI releases the implementing rules, the application process for subsidies, grants, and low-interest loans will open. To be ready, organize your business documents: SEC or DTI registration, business permits, financial projections, and a clear production plan. Having these ready will let you apply immediately rather than scrambling when the window opens.
Consider a Hybrid Model
If you are torn between manufacturing and retail, a hybrid model—where you produce a small line of your own shoes while also stocking complementary local brands—could maximize the bill’s benefits. You would qualify for manufacturer incentives while still capturing retail margins. The shared service facilities in the Shoe Manufacturing Hubs could make this feasible without a massive capital outlay.
Watch for DTI Announcements on Hub Locations
The DTI, in coordination with local government units, will identify strategic locations for the Shoe Manufacturing Hubs beyond Marikina. If you are in a region with a strong footwear tradition (e.g., Liliw, Laguna or certain areas in Cebu), your area may be prioritized. Following DTI regional offices on social media or subscribing to their newsletters can give you early access to location announcements.
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Frequently Asked Questions
Do I need to be a manufacturer to benefit from the bill? ▾
How long will the Shoe Industry Development Fund last? ▾
Can I apply for low-interest loans before the bill is passed? ▾
What does “import duty exemption for equipment and raw materials” cover? ▾
Is the “Buy Local, Wear Local” campaign mandatory for private businesses? ▾
Will the bill help me if I want to export shoes? ▾
The proposed Senate Bill 2994 offers a rare convergence of government support and market opportunity for anyone serious about the Philippine shoe industry. The incentives are real, but they are conditional—tied to manufacturing, local sourcing, and compliance with future DTI rules. The smartest move right now is to prepare your business structure and supply chain so that when the law takes effect, you are ready to step in, not waiting on the sidelines.
If this was useful, you might also want to read franchise opportunities in the Philippines with strong community engagement.
Sources
Want your own pizza place in the Philippines? — A practical guide to another food business opportunity with a different cost structure and market dynamics.
Side hustle to full-time: part-time franchise options for Filipino professionals — Compares low-commitment business models that could complement a shoe store startup.
Pimentel eyes resurrection of shoe PHL industry. BusinessMirror, July 23, 2026.
Pimentel files bill to revive PH Shoe Industry. Philippines Industry Times, July 23, 2026.
